Intel, feds reach deal on $8B in CHIPS money

(The Center Square) – After delays and lobbying from business groups around the country, the U.S. Department of Commerce and Intel announced a deal Tuesday morning to release nearly $8 billion in direct CHIPS Act funding.

The $7.86 billion directly impacts Intel’s commercial semiconductor manufacturing and advanced manufacturing projects in Ohio, Arizona, New Mexico and Oregon.

Overall, the California-based company says its planned U.S. investments, including those not supported by CHIPS, will lead to more than 10,000 company jobs, 20,000 construction jobs and more than 50,000 indirect jobs with suppliers and supporting industries.

“With Intel 3 already in high-volume production and Intel 18A set to follow next year, leading-edge semiconductors are once again being made on American soil,” Intel CEO Pat Gelsinger said in a release. “Strong bipartisan support for restoring American technology and manufacturing leadership is driving historic investments that are critical to the country’s long-term economic growth and national security. Intel is deeply committed to advancing these shared priorities as we further expand our U.S. operations over the next several years.”

Aside from manufacturing and technology plans, Intel will use $65 million to create more skilled semiconductor workers by training students and faculty at a variety of education levels. Also, $5 million will be used to increase child care availability near the company’s facilities, and $4 million will help with the CHIPS Women in Construction Framework.

“The CHIPS for America program will supercharge American technology and innovation and make our country more secure – and Intel is expected to play an important role in revitalization of the U.S. semiconductor industry,” U.S. Secretary of Commerce Gina Raimondo said.

Ohio Gov. Mike DeWine welcomed the announcement that continues to move forward Intel’s massive $20 billion chip manufacturing site in central Ohio. The site broke ground in September 2022 and is expected to lead to 3,000 direct jobs, 7,000 construction jobs, and what Gov. Mike DeWine called tens of thousands of additional indirect and support jobs.

Communities throughout central Ohio also welcomed Intel’s initial announcement and scrambled to develop plans for expected expanding schools, as well as housing and infrastructure needs.

“Today’s announcement that Intel-Ohio is receiving CHIPS Act funding is a much-needed step forward in the important objective of making the most advanced computer chips in America. The DeWine-Husted Administration has never wavered in its pledge to bring these chip manufacturing plants to Ohio,” DeWine said in a statement Tuesday morning. “The work to build the Silicon Heartland now moves forward with even more certainty, advancing our economic and national security to the benefit of the working people of Ohio and America.”

In its first progress report required to Ohio leaders, Intel said in March it had spent $1.5 billion and committed another $3 billion to the project in the Columbus suburb of New Albany. The project includes $2 billion in incentives for the two planned microchip manufacturing facilities in Licking County, including taxpayer-funded grants and tax incentives.

Intel’s contract with Ohio says it must meet its job-creation goals by 2028.

The announcement comes after U.S. House Speaker Mike Johnson, R-La., said recently that Republicans would probably try to repeal the act that Ohio Republican leaders have praised for years and led Intel to announce a $4.5 billion commitment to the state in the largest single private-sector investment in state history.

In mid-November, the Ohio Chamber of Commerce and nearly 20 business groups from four states wanted the Biden administration to start handing out money from the CHIPS Act immediately. In a letter, the groups from Ohio, New York, Oregon and New Mexico wanted the money distributed now.

The CHIPS Act, more formally the Creating Helpful Incentives to Produce Semiconductors and Science Act, was signed into law by President Joe Biden in August 2022. The final roll-call votes were 64-33 in the Senate and 243-187 in the House of Representatives.